- Renters say that flexibility and freedom are two of the main reasons they don’t want to own a home.
- Repairs and other homeownership responsibilities are another reason they’d rather rent.
- Instead of spending money on a home, renting frees up cash for other goals.
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Renters are reaping the benefits of the homebuying craze, as rents across the US have fallen. In New York City, median rent prices fell between 8.6% and 15.5% across various neighborhoods. In San Francisco, rents fell to a six-year low. The pandemic has turned many markets from a landlord’s market to a renter’s market.
But for some, that’s not the reason they’re avoiding the buying trend. Insider interviewed several renters who have decided to keep renting through the pandemic, and all agree that they’re happy renting their homes right now and well into the future.
Renting brings a level of flexibility homeownership can’t
For those who have never wanted to stay in one place, renting instead of owning a home has the most appeal.
Pre-pandemic, Kristy Shen and Bryce Leung divided their time between the US, Canada, Portugal, Bali, and Thailand, and are currently staying in Toronto, Canada. They’d like to go back to their nomadic lifestyle when restrictions lift, and it’s a big reason they have no desire to own a home. Moving around has become their lifestyle, and renting fits it best.
“Once the pandemic is over, we’ll continue living our nomadic life renting Airbnbs around the world,” Shen told Insider via email.
Pasadena-based freelance writer Jackie Lam agrees that the flexibility is key. “I’ve been working from home for the last six years, I love the flexibility I have with renting,” Lam told Insider via email. “I can uproot and move any time I would like, and I can move to a different space if needed.”
Renting frees up cash for goals like financial independence
Homeownership is a massive expense, from buying the property to keeping it up and fielding emergency repairs. For many people, these costs are a big reason they’d rather rent.
Mahi Amaha of Maryland doesn’t see herself and her family buying a house anytime soon. As she works towards financial independence and retiring early, she doesn’t see homeownership as a part of her strategy.
“Nationally, real estate growth is only about 4% a year on average, and when you consider inflation is at about 3% a year, that is only a 1% growth a year on average,” Amaha told Insider. “This is very similar to putting your money in a high-yield savings account without the burden of coming up with a down payment and closing costs.”
Instead, she’d rather work towards her goals by investing. “I personally don’t see [a home] as an investment, but rather a forced savings account,” she said. “My family invests in the stock market (mostly index funds) that have historically had way better returns.” The average 10-year stock market return is 9.2%, according to Goldman Sachs’ analysis of the past 140 years.
Not spending money on a home helps Amaha and her family better budget for their FIRE journey. “Rent is the maximum you have to pay for an apartment, but a mortgage is the minimum you have to pay for a home,” she told Insider.